FTT price has dropped by more than 12% in the past seven days following some issues with a leaked Balance Sheet of FTX’s sister firm Alameda Research.
In particular, the leaked balance sheet showed an imbalance in Alameda’s financials and triggered fear among investors who have been withdrawing funds including stablecoins from FTX at an alarming rate.
Nansen data shows that more than $451,000,000 worth of stablecoins have been withdrawn from FTX in the past seven days.
The leaked Balance Sheet
Leaked Balance Sheets showed Alameda Research’s $14.6 billion assets and approximately $8 billion in debts, including $7.4 Billion in loans. Out of the listed assets Alameda owns $3.66 billion in “unlocked FTX token (FTT)” and $2.16 billion in FTT tokens as collateral.
Besides the imbalance, investors also fear that a huge portion of Alameda’s asset holdings is in FTT tokens rather than traditional assets like fiat currencies.
Alameda’s CEO Caroline Ellison later clarified via a tweet that the leaked balance sheet only showed part of the firm’s holding saying that Alameda has an additional $10 billion in assets. However, the clarification did not quell market responses and investors’ fears.
Binance plans to liquidate large amounts of FTT tokens
Binance received $2.1B worth of FTT tokens, BUSD stablecoin, and BUSD stablecoin from Binance when it exited FTX equity in 2021. Binance CEO Changpeng Zhao stated that Binance plans to liquidate large amounts of FTT tokens on the market (more than 500 million).
For more details on Binance’s FTT token liquidation, you can read this: “Is FTX insolvent? Binance selling FTT, why? – Deep Dive.“
Investors are betting against the token as the impending FTT liquidation in Binance and increased stablecoin withdrawals by Binance will likely drive the price of FTX token down.
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